(Yicai Global) March 23 -- ZTE’s shares shot up after the Chinese telecoms equipment maker confirmed that it had exited a five-year probation period in the United States imposed because of export compliance issues.

In Shanghai today, ZTE [SHE: 000063] closed 10 percent higher, the exchange-imposed daily limit, at CNY25.99 (USD4.08), while its Hong Kong-listed stock [HKG: 0763] soared as much as 60 percent before finishing up 23 percent at HKD19.16 (USD2.45). Trading in the shares was suspended on both bourses in the morning pending the announcement.

ZTE said it received a ruling from a US court in Texas declining to revoke the probation period or impose any new penalties on the Shenzhen-based company. The probation ended on schedule yesterday.

ZTE became subject to US export restrictions in March 2016. A year later, US government departments reached a deal with the company, fining it USD1.19 billion, of which USD300 million was suspended, and had since assigned compliance monitors to the firm.

ZTE announced late on March 4 that it had received an order from the US court notifying the company to attend a hearing scheduled for March 14 on revoking the probation period.

The news triggered concerns about a possible extension of the period. ZTE shares slumped more than 8 percent on March 5. At the time sources close to ZTE told Yicai Global that any new allegations could have an impact on the monitoring.

The latest court ruling “means that the probation period has expired, and not revoking it is to complete the existing probation period,” a source close to ZTE told Yicai Global today. This also indicates that ZTE has won in the hearing, the person added.

China Merchants Securities said in a research report today that ZTE’s victory is good for the recovery in valuations of listed telecoms firms, and that the relationship between overseas operators and Chinese telecom equipment suppliers may again yield opportunities.

Editor: Peter Thomas